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Appendix 6 2008

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  ~Conceptualized by Robert Kaplan (Harvard University) and David Norton, the balanced scorecard (BSG)is a performance evaluation instrument that forces an organization to identify a number of factors that arecrucial to the success of an entity. These critical success factors naturally vary from organization toorganization; typically, though, they fall in one of four categories: financial; customer satisfaction;efficiency, time, and quality; and learning, growth, and innovation. A number of metrics are specified thatmust be consistent with the organization's strategy, and a manager is held accountable for the results inhis/her unit. In short, BSCs are consistent with responsibility center management, stress both unit andoverall organizational objectives, and in many cases, serve as the basis for budget allocations. Those unitsthat accomplish pre-set unit and organizational goals are rewarded; those that fail are not.BSCs are finding their way into university environments, with a great deal of the application appearing, to fallin the various service functions that exist on a campus (accounting, maintenance, technology support,human resources, and so forth). UMKC is no exception-BSCs are being used here as well. Given theCommittee's charge to look at budgeting from a Responsibility Center perspective and the desire to buildfinancial incentives into the budget model, we are recommending the use of balanced scorecards torecognize and reward outstanding unit performance.In assembling a balanced scorecard, the Committee recognizes that not all units are identical inorganization, operation, and mission; however, all such units operate under a common UMKC umbrella.Thus, while not all scorecards need be identical, there must be a common framework so that the incentivessystem will function as intended. We recommend that the enhanced Programs Evaluation Committee andthe Support Costs Review Committee issue general guidelines concerning template construction, and thatResponsibility Center managers participate in a collaborative manner in the scorecard-construction process(Le., a bottom-up approach). In the case of academic units, this would involve Deans working inconjunction with their faculty to tailor their unit's scorecard to both advance their traditional missions ofexcellence in teaching, scholarship and service and foster collaboration with other units in pursuing UMKC'sgoals.Academic Unit ScorecardsScorecards that are prepared for academic units would probably contain some of the same measures asthose used by support units, and would likely incorporate aspects of a university's traditional missions(teaching, research, and service). The Committee took the liberty of constructing a sample scorecard - andindeed, it is just an example - by relying, in part, on the following three items: . The University of Missouri System Strategic Themes and Goalshttp://www.umsvstem.edu/ums/about/strateaic/ . Toward a Balanced Scorecard for Higher Education: Rethinking the College and University Excellence Indicators Framework, Higher Education Forum,http://www.odl.rutaers.edu/resources/pdf/score.pdf . Designing and Implementing an Academic Scorecard, UrbanEd, http://www.usc.edu/dept/education/news/urbanedO4/25.pdfThe scorecard could be based on a message that the Committee has heard on several occasions duringthe past few months through dialogues with the Chancellor, ongoing conversations with the Provost, andseveral presentations to Deans and the faculty as a whole. That is, the following three actions arebecoming more and more a part of the University's plans for the upcoming year(s): For Internal Discussion Purposes Page ~ University Budget CommitteeThe Balanced Scorecard APPENDIX 6  ~Significant growth in undergraduate student credit-hour productionIncreased use of scholarships/waivers funded with private dollars and less reliance onscholarships/waivers funded with operating monies . A reduction in targeted campus financial obligationsThe UBC believes that each academic unit can probably playa role in one or more of these actions. Thus,the scorecard might be designed to reflect a primary goal of the academic unit (e.g., increaseundergraduate student credit hours) and a secondary goal (e.g., secure increased private funds forscholarships). The primary goal might be weighted heavier than the secondary goal and collectively, thetwo goals might count for an equitably designated percentage of the academic unit's total scorecard evaluation at year-end. 1 The remaining percentage of the evaluation would then be based on achieving various other importantgoals to the unit and/or the University, perhaps focusing on the following areas shown and evaluated by themeasures indicated below.2 . Attract and maintain a high-quality, diverse student body, and ensure that the studentshave a satisfying educational experience . Quality of enrollees (standardized test scores) . Retention rates . Graduation rates . Enrollments of students from underrepresented population groups. Satisfaction index (including return on investment) . Offer high-quality programs with high-quality faculty P~rn~: .. Number of programs accredited by top accrediting group in field. Number of individual, nationally ranked programs. Program outcome measures: MFAT, pass rates on professional exams, etc.. Job placement successFacultv:. Number of endowed chairs and professorships. Number of academic awards and honors. Number of national offices held. Number of grant proposals submitted and awards per faculty member . Number of top-tier publications and other journal publications per faculty member . Number of presentations, products, exhibitions, and books per faculty member I The overall scorecard s based on an understanding that a unit would not be penalized for circumstances clearly beyond itscontrol that preclude or limit its ability to implement one or more of these (and other) targeted initiatives.2 The Committee recognizes that this template would need considerable modification for the Libraries and the School of GraduateStudies, both of which are considered to be academic units for purposes of the Balanced Scorecard evaluation. For Internal Discussion Purposes Page 2 . ~ University Budget CommitteeThe Balanced Scorecard APPENDIX 6  ~ . Be cQnscious ofselectedintern(J,1 w()rkplace;ssuesa:s weJ/asexternalactivities that focuson UMKC's urban/community ,rUssion . Salary, urnover ardsatisfac;tior()ffcaQultY,~tcaff carded rn nistrators. N u mb~rofem pl()yeesJroml.lndEkr~preselltepp6pl.llations . Nul)1ber,ofstLJpenthoursQfcpmrTIl.lnityseryice . . NurTIber6f.llpn-degreeprdgrarTIsahde\l~htscoh§istent with theurban/communitymisslon.. Maintain a fin an ciaJ/y healthy and efficient unit operation . Totaloperatingr~venues . 8ottom lineSurplLJs . . Operating budget per FTEstudent . Number of donors . Number.and %'ofalumni'dollors . Number.ofalumnLevellts . Totalprivategifts{$) . Faculty/student fcatios . Avercage lass size . Student credit hours g~nerat$pperFTgt~hur$'d/tenure-track aculty member . % of s~ctions taught byt~nLJr~ 7trac;kltenLJr~d.fac:ultY . Total student credit hourproductionSupport Uf'lit ScorecardsSupport Unit scorecardswouldtypiccally includel rlea~qres<.that~ alu~te customer-service aspects of theiroperations,efficiencyofbusiness. pr()c:ess~s, ~fj()LJsfin?ln(3icalm~tri(3$,/and ssorted workplace dynamics(such as employee satisfaCtion,turnoverrate§,~hds.pforth). Sample excerpts from a Support Unitscorecard currently used by UMKC'$pivisionofAprTIinistr~tipnianQF ihanCe follow. .. ~ University Budget CommitteeThe Balanced Scorecard APPENDIX 6 as well as external activities that focus member ~ '. ~  Sample Excerpts of Measurements rom Division of Administration & Finance Balanced Scorecard Quality Customer Service Service Qualitv: Percentage of total survey respondents indicating extremely and very satisfiedwith access, accuracy, consistency, and convenience of service provided. (Results collected quarterly through customer surveys.)Timeliness: Percentage of total survey respondents indicating extremely and very satisfied with thepromptness by which services are delivered. (Results collected quarterly through customer surveys.)Customer Relations: Percentage of total survey respondents indicating extremely and verysatisfied with the responsiveness, courtesy, competency, and knowledge of staff who providecustomer services. (Results collected quarterly through customer surveys.) Excellence in Business ProcessesCost per Transaction: The cost of labor and materials divided by the total number of transactions(Results collected from departments.) rocessed. The ability of key business processes to satisfy botheature requirements. (Results collected through customer surveys.)Percentage of key internal customers indicating verysatisfied with the Division's ability to understand and meet their business requirements. (Resultscollected quarterly through customer surveys.)Customer Enaaaement: d -- - . - , ~Motivated and Productive PeopleRetention: Annualized percentage of benefit eligible employees retained over a 12-mOraanizational Climate: Percentage of surveyed employees indicating extremely or very satisfiedwith the level of communication, engagement, empowerment, and accountability within their workenvironment. (Results collected quarterly hrough employee satisfaction surveys).Employee Satisfaction: Percentage of surveyed employees indicating extremely or very satisfiedwith their job and working conditions, and would recommend the University as a place ofemployment. (Results collected quarterly through employee satisfaction surveys).Resource Management . Cost of Services: The Division's annual operating expenditures, divided by theUniversity's total expenditures, from the following fund groups: operations, auxiliary, service operations, and gift. (Results calculated annually using UMKC Financial reports.) Return on Net Assets: Annual change in net assets of the various auxiliary and service operationfund departments (e.g. parking) divided by the average of the beginning of the year total net assetsand ending of the year total net assets. (Results calculated annually using UMKC Financial reports.)Operatina Marain: Annual operating surplus in Fund 000 divided py the total revenue in Fund0000. Of the total annual operating margin, 5% must be held as a contingency fund to addressrevenue shortfalls or unexpected expenditures. (Results calculated annually using UMKC Financialreports.) Responsible ~ University Budget CommitteeThe Balanced Scorecard APPENDIX 6customer ~ satisfiedand onth period. For Internal Discussion Purposes Page 4
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